Most times, as an aspiring entrepreneur or an upcoming entrepreneur, it is so annoying and frustrating when you are able to come up with excellent ideas that is capable of solving the problems of the society and you are unable to raise capital for your business.
Without capital for your business idea, your beautiful business plan may not be carried out completion exception if you desire to sell your idea for cash or exchange it for small holding in the business arising from your idea.
How Can You Access Capital for Your Business Idea
Access to capital and credit is required in starting or growing a successful business, Millions of people all over the world receive loans or grant to start or expand their businesses. You too can raise the capital and this requires knowing the different sources of finance to get the money you need to fund your business ideas.
You can make a choice from the following source of finance;
1. Personal saving can be used for takeoff.
2. Money can borrow from relations and friends where possible.
3. Seek out an “angel investor” among your acquaintances or philanthropists. You can register with website which link up entrepreneurs with angel investor (e.g. http://www.angelstartups.com.ng) .
3. Association (including religious groups) you belong to, can be approached for financial assistance.
4. Equipment leasing which provides a loan in which the lender buyer and owns equipment and then rents it out to your business at a flat monthly rate for a specific period of time.
5. Use a written contract between you as a seller and the buyer or invoice purchasing order (I.P.O) from a “ready” buyer to raise fund i.e. “typing up”.
6. Sell personal assets which include intellectual properties and/or financial instruments such as stocks, bonds, mutual, funds, note (IOUs).
7. Obtain loan from financial institutions such as banks and any other grant agency.
8. Product or service launch allows you to use few of your product/services for presentation to a few select people in order to get attendees to contribute to your business initiative.
9. Private placement used by limited liability companies to sell shares of the company privately to a few people organization.
10. Issue a commercial paper; debt instrument issued by the company as a negotiable promissory note with a term of few days to a year.
11. Instead of sole proprietorship, have a business partnership that would allow you bring on reliable partners who can contribute fund for the business.
12. Venture capital fund is available for a business that is considered profitable by the funding agencies. Currently, most countries have a pool of fund held by banks for acquiring certain percentage equity of companies with successful applications.
13. Find a Royalty fund advanced to companies with sound and profitable prospects tied against their future sales of products and service. Fund advanced to you is paid back to creditors by periodic deduction of a percentage of returns made from sales.
14. Franchise your business model to another company to operate under your business identity. Money realized from franchise sale can provide much needed funds.
15. Inheritance as bank deposit, property, share etc. can be processed and claim to ownership effected through probate registry.
16. Access international grant often provided to local banks for funding some sectors of local economy.
17. Corporate and individual sponsorship is available to noble business ideas, humanitarian in nature than profit oriented and possibly share semblance with corporate social responsibility program of some big corporations e.g. providing prescription glasses to the indigent in an area the big corporations are operating.
18. Borrowing done by just presenting a credible guarantor who stands as your surety to your potential creditor.
19. Assess government incentives available in some business sector to promote national objectives and interests in those sectors after sufficient investigation to establish if your business idea qualifies for government incentives or could be adjusted to merit the incentive.
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